Rebecca Garza CLA Wealth Advisory November 2020 WEALTH

Rebecca Garza CLA Wealth Advisory November 2020 WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING Investment advisory services are offered through Clifton. Larson. Allen Wealth Advisors, LLC, an SEC-registered investment advisor © 2020 Clifton. Larson. Allen LLP Social Security Strategies

Create Opportunities © 2020 Clifton. Larson. Allen LLP Clifton. Larson. Allen Wealth Advisors, LLC (“CLA Wealth Advisors”) The purpose of this publication is purely educational and informational. It is not intended to promote any product or service and should not be relied on for accounting, legal, tax, or investment advice. The views expressed are those of CLA Wealth Advisors. They are subject to change at any time. Past performance does not imply or guarantee future results. Investing entails risks, including possible loss of principal. Diversification cannot assure a profit or guarantee against a loss. Investing involves other forms of risk that are not described here. For that reason, you should contact an investment professional before acting on any information in this publication. Financial information is from third party sources. Such information is believed to be reliable but is not verified or guaranteed. Performances from any indices in this report are presented without factoring fees or charges, and are provided for reference and competitive purposes only. Any fees, charges, or holdings different than the indices will effect individual results. Indexes are unmanaged; one cannot invest directly into an index. Investment advisory services are offered through Clifton. Larson. Allen Wealth Advisors, LLC, an SEC-registered investment advisor. 2

1. Social Security Tax 2. Social Security Benefits 3. Collecting Early 4. Delaying Benefits 5. Life Expectancy 6. Break Even Point 7. Spousal Benefits 8. Survivor Benefits 9. Taxation of Benefits 10. Collection Strategies 11. Implications of the 2020 Election Create Opportunities © 2020 Clifton. Larson. Allen LLP Table of Contents 3

© 2020 Clifton. Larson. Allen LLP Employee/Employer Social Security Taxes • Employees are taxed 6. 2% of their earnings for Social Security • Employers contribute an additional 6. 2% of Social Security tax • As Methodist clergy, for the purpose of Social Security taxes you are considered self-employed, and therefore contribute both a total of 12. 4% of earnings to Social Security Create Opportunities 4

© 2020 Clifton. Larson. Allen LLP Social Security Benefits • Individual Benefits: o Based off the best 35 years of employment history (Lower earnings/employment gaps) o Full Retirement Age (FRA) Create Opportunities 5

Create Opportunities © 2020 Clifton. Larson. Allen LLP Cost of Collecting Early 6

• Prior to FRA, 2021 annual income (wages) limit is $18, 960. $1 of SS benefits will be withheld for every $2 earned above this limit. • The year of FRA the 2021 limit increases to $50, 520, and $1 is withheld for every $3 earned above the limit. • Once you reach FRA there is no income limit for receiving SS benefits. • If you file and begin receiving benefits, but later wish you had waited to take it, you have 12 months to withdraw your application and pay any benefits received back to the IRS. © 2020 Clifton. Larson. Allen LLP Working While Collecting Early Benefits Source: Social Security Administration (ssa. gov) Create Opportunities 7

Create Opportunities © 2020 Clifton. Larson. Allen LLP Delaying Benefits 8

Create Opportunities © 2020 Clifton. Larson. Allen LLP Life Expectancy 9

© 2020 Clifton. Larson. Allen LLP Break Even Point Source: Yahoo! Finance (finance. yahoo.

• You are eligible to receive your own benefit, or a spousal benefit, which can be up to 50% of your spouse’s PIA © 2020 Clifton. Larson. Allen LLP Spousal Benefits Rules to Remember: • • • The primary worker must have filed for their own benefit The spouse must be 62 for a reduced benefit or FRA to receive the full 50% There is no increase in benefits in delaying after FRA Create Opportunities 11

• If your spouse predeceases you, you are eligible for a survivor benefit equal to your spouse’s benefit © 2020 Clifton. Larson. Allen LLP Survivor Benefits Keep in Mind: • • • If you are taking your own benefit and apply for survivor’s benefit, your benefit will stop If your own benefit is higher, you will continue to receive your benefit A widow/widower can begin taking a survivor benefit at age 60 as long as they have not remarried, however that benefit will be reduced unless you wait until FRA Create Opportunities 12

Create Opportunities © 2020 Clifton. Larson. Allen LLP Taxation of Social Security Benefits 13

Create Opportunities © 2020 Clifton. Larson. Allen LLP SS Collection Strategies – Married Age

Create Opportunities © 2020 Clifton. Larson. Allen LLP SS Collection Strategies – Married FRA

Create Opportunities © 2020 Clifton. Larson. Allen LLP Married Couple with Large Difference in

• Removal of the cap on SS wages, currently $137, 700 • Indexing benefits to AGI • Increasing the retirement age for young people Create Opportunities © 2020 Clifton. Larson. Allen LLP Implications of the 2020 Election 19